I haven’t actually gotten around to running an ACKS campaign yet, still in the setup process. In conversation with one of my regular players, we came across the subject of “investing in existing businesses”. IE, buying a tavern, bankrolling a blacksmith, etc. I’m sure there’s a way to hack out something from the Mercantile Ventures and Urban Development sections to handle this, but I’ll be darned if I can come up with it Anyone have any suggestions?
As a general rule, investing in an existing business can yield a 3% rate of return per month. For example, a business with an investment of 1,000gp can yield 30gp per month.
To randomize it, roll 1d10-1d4% per month.
Yowzers. Assuming you re-invest, that’s a 43% return on capitalization per year - or a 100% return per two years. Even if you don’t re-invest, you make a 108% return in three years.
Of course, then I re-read the mercantile ventures section, and it seems to be generally assumed that adventurers are highly successful in business. No reason to assume that investment bankers are all epic level
It only seems high to modern capitalists used to low profit rates and low interest rates where rule of law and low risk allows us to take for granted that we can have a time horizon in decades.
A society's rate of interest is driven by the time preference of its populace. In the ancient and medieval world, time preferences tended to be very high - most wealth was consumed, nobody knew how long they'd live, and there was no thought of "retirement planning". As a result, getting someone to give up their present consumption in exchange for consumption at a later date was very expensive. Medieval interest rates charged were very, very high. The rate of profit tends to equal the rate of interest. Few people could accumulate enough capital to take advantage of the opportunities for profit, of course. And those who did make a profit most often spent it, as the idea of capital accumulation was only dimly understood.
Those are the assumptions that ACKS is based on. For the most part, they work well. Take a typical PC - who's not sure if he's going to be alive in 2 sesssions, let alone 2 years. If he decides to invest 10,000gp in the hopes of doubling that to 20,000gp in 2 years, that's not really a problem. He'll have made and spent a lot more than 10,000gp or even 100 000gp in 2 years. In playtesting, few players are willing to give up X today to get 2X in 2 years.
On the other hand, if your PCs begin to run their businesses like 21st century businessmen, with double-entry book keeping and risk-adjusted rate of returns, you'll want to change your game a bit. You could assume that some sage has stumbled upon the secrets of Adam Smith and David Ricardo, and assume that all the NPC businessmen begin to do the same thing the PC is doing. That'll reduce the rate of return substantially.
Or you can start to have the local lords raise their taxes and confiscate wealth, as they are unhappy with these upstart "bourgeoise".
Or you can start to have more wandering monsters, attracted by all the wealth.
Also interest rates were high because of high partially because of high levels of risk. A lot of loans made were never paid back and there’s all sorts of things that can go wrong in a Medieval villahe.